Tesla to build small electric car in Germany – report

US electric-car giant Tesla is expected to build its highly-anticipated small electric car in Germany, according to the latest reports out of Europe.

Last week, Tesla CEO Elon Musk visited the Gruenheide factory near Berlin which produces the Tesla Model Y electric SUV for Europe – the best-selling vehicle on the continent this year.

According to news agency Reuters – citing a source close to the electric-car specialist – Mr Musk reportedly told the factory’s staff that Tesla’s long-rumoured ‘sub-$US25,000/€25,000’ ($AU38,500) small electric car will be produced at the facility.

According to the publication, the average list price of an electric-car in Europe is more than €65,000 ($AU107,400), compared to the equivalent of €31,000 ($AU51,200) in China.

While no specific time for production to begin was provided, previous unsubstantiated reports out of China have recently claimed the first version would be built in 2025.

The latest report complements previous speculation that the less-expensive Tesla will be built in Mexico or near Tesla’s global headquarters in Austin, Texas.

It is likely the German-built version would be sold in European and Middle Eastern markets, as with the European-built Model Y today – while the US and Mexican-made models would be sold in other countries.

The small Tesla will form part of the electric-car maker’s plans to expand its German factory’s production output to one million vehicles per year – a figure which would eclipse the circa-800,000 cars built at Volkswagen’s Wolfsburg facility annually, currently the largest in Europe.

In September, a biography on Tesla CEO Elon Musk revealed new details about the vehicle’s design, claiming it will adopt styling similar to the controversial Cybertruck electric pick-up.

More information about the Tesla small car is expected to be revealed closer to its launch.